The National Association of Securities Dealers, Inc. and the Conference of State Bank Supervisors have entered into an agreement to develop a nationwide licensing system for state residential mortgage regulators. This 18-month effort, which involves CSBS, the American Association of Residential Mortgage Regulators and the industry to develop uniform mortgage licensing applications that would be used by each state mortgage regulator. Industry leaders are hoping that the system will lead to benefits from access to a national licensing and enforcement repository, and will likely be the result of the uniform application process and produce more closely related regulations throughout the states.
There are quite a few industry skeptics with growing concerns about how such a system will be implemented, but there are a few states that are currently testing the forms for new license applications. We could be seeing this new system available as early as January 2008, and so far a total of 30 state agencies have agreed to participate in the system. An online mortgage banking compliance service, iComply, suggests that careful consideration should be taken when deciding what information will go into the new system. A pilot program was tested in Illinois, in which implementation issues were much more dificult than anyone anticipated.
1. Thank god this is happening. But maybe to late.
My name is Steven Krystofiak, President of the Mortgage Brokers Association for Responsible Lending. www.mbarl.org I have a letter in a word document form that highlights the risks of the current loan industry unrealized by regulators and economists alike, mainly due to stated income loans.
Email me at contact@mbarl.org if you want me to send you a copy.
~ Steve Krystofiak
13 main points in the letter are;
1. Stated income loans are associated with fraud, and started to become popular in 2002.
2. Banks originate these loans because they are profitable and then sell them to reduce their risk.
3. Fraud is encouraged by the banks
4. Stated income loans help no one.
5. Exotic loans originated with stated income are now causing foreclosures or forcing homeowners to refinance into negatively amortized loans.
6. Stated income loans are why home prices have skyrocketed. They have caused a large demand in the US housing supply.
7. Banks have sold their loans and have already made their profit. Investors will soon realize stated income loans are too risky and stop purchasing them.
8. Almost anyone can get a stated income loan for $950,000.
9. Stated income loans cost consumers hundreds of dollars a year because of higher interest rates.
10. Stated income loans allow tax cheats to purchase homes easier.
11. Stated income loans are not always faster than fully documented loans.
12. Appraised values are often inflated. Underwriters are basing their decision on inflated home values, inflated incomes and inflated assets. The only “real” number is the FICO (credit) score. This is why underwriters have become focused on FICO scores.
13. Rules are not enough, they must be enforced.
Posted at 8:37PM on Jul 14th 2006 by mbarl